Articles, news & legal alerts

Read the latest news from Scali Rasmussen, including legal alerts and event listings.

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On May 23, 2022, in Naranjo v. Spectrum Security Services, Inc., the California Supreme Court settled an open question concerning the nature of the meal break premium employers owe to employees when the miss a meal break. It held that they are wages, must be disclosed on the wage statement and must be accurately paid out on the final check. Furthermore, in the event they are not accurately paid, the employer can be liable for waiting time penalties. Finally, the California Supreme Court clarified the rate of pre-judgment interest that applies (7%) to failure to comply with these requirements.

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The Federal Trade Commission (“FTC”) amended their Standards for Safeguarding Customer Information (16 CFR Part 314) (“Safeguard Rule”) that requires compliance by December 9, 2022. The Safeguard Rule was designed to protect the security of customer information and the recent amendments were for the purpose of keeping up with technology. Specifically, the latest version of the Safeguard Rule requires financial institutions (which includes motor vehicle dealers) to develop, implement, and maintain an information security program with administrative, technical, and physical safeguards designed to protect customer information. The FTC published detailed guidelines to maintain compliance with the Safeguard Rule.

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In a long-anticipated 8-1 decision, the United States Supreme Court invalidated part of a key 2014 California Supreme Court Private Attorneys’ General Act (PAGA) decision, Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348. Absent a possible future legislative “fix” by the California legislature, the state of play is that California employees who sign representative class waivers may be compelled to arbitrate their individual PAGA claims while their representative PAGA claims are dismissed in state or federal court.

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California employers facing an attorney demand for waiting time penalties for allegedly failing to pay a freelancer on the employer’s next scheduled employee payday can take comfort from a recent Ninth Circuit Court of Appeals decision, Bijon Hill, Plaintiff-Appellant, v. Walmart Inc., No. 21-15180 (9th Cir. Apr. 26, 2022). Hill involved a print model engaged for 15 day-long non-consecutive photo shoots arranged by Walmart through a third-party agency. Though the agency contract specifically designated models as “independent contractors” and set out a specific payment schedule, Hill claimed she was an employee entitled to be paid on Walmart’s next regular payday. Though she was paid in full, she argued she was entitled to over a half-million dollars in waiting time penalties.

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Bleach, hand sanitizer, single use plastic bags all were necessary to human health and safety during the pandemic. Will they be blackballed again once there is a cure, or will we stick by our old tried and true friends?

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Of all the discovery tools available to litigators, depositions are undoubtedly the most important, particularly a deposition of an opposing party, i.e. a party-deponent. Not only does the deposition provide substantive testimony necessary to properly evaluate the case from a purely legal standpoint, but the deposition of a party-deponent allows all counsel to assess the witness herself, an equally important aspect of risk assessment. How will the party-deponent present to a jury? Is she credible? Will she “crumble” in response to tough questions? Does her body language reflect dishonesty or uncertainty? Our clients are always made aware of both the specific testimony provided by a party-deponent—and its impact on the case—and our impression of the witness. Again, both aspects are necessary for the client to properly evaluate its risk.

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The phrase “jury selection” sounds like attorneys select who is going to sit on the jury. That’s a bit inaccurate—trial attorneys instead attempt to exclude those potential jurors for that case that they do not want to be a juror. Attorneys are provided with a group of potential jurors and then ask questions (“voir dire”) to determine whether that potential juror is one they want to sit in judgment on the case.

Unwinding the deal

The remedial power of recission

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Once a contract is executed between parties, it is often assumed—wrongly—that the only remedy for a problem that may subsequently arise is to sue for breach of contract and seek money damages. In fact, depending on the circumstances under which the contract was formed, the best remedy for the problem may be to simply unwind the agreement entirely and restore the parties to their pre-contract position. This is the remedial power of the legal right of rescission.

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In a recent case successfully prosecuted by Scali Rasmussen, a vehicle dealer sought recovery of amounts improperly withheld by the vehicle manufacturer, following the termination of the dealership franchise at the dealer’s election. The action was based on California Vehicle Code Section 11713.13. Pursuant to Section 11713.13, the manufacturer was obligated to repurchase certain of the remaining dealer inventory at dealer cost. Following the termination, a dispute arose regarding the amounts withheld by the manufacturer from the repurchase amount for that inventory owed to the dealer.

Vehicle inventory scarcity and dealer markups

What are the dealer’s rights when faced with pressure from factories to curb markups?

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COVID-19 and the chip supply shortage has made new vehicle inventory scarce. This has resulted in fewer vehicles available for sale. And as the pandemic ends and people are getting back to their workplaces, demand continues to rise for new vehicles. A fundamental principle of economics is that price inflation results as supply dwindles and demand rises. Specifically, as retailers seek income equilibrium to meet normal operating expenses amid reduced sales volume, artificially created by a reduction in supply, their only choice is to increase the sales price of their remaining inventory.

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